Bank of England: pay figures will fuel raging interest rate debate

It's been a decade since the Bank last raised borrowing costs but if wages go up and the pound rallies, a hike could be on the agenda

There is more fuel for the raging debate around UK interest rates this week, with official figures on pay growth out on Wednesday. Investors and policymakers alike are looking for any signs that a tight labour market can translate into faster pay growth, a trend that has so far proved elusive this year. If wages do start to get going again, the pound is likely to rally as traders price in a greater chance of a 2017 interest rate rise.

This month marks a whole decade since the Bank of England last raised borrowing costs. Since then, the only way has been down and interest rates are currently at a record low of 0.25%. But that could be about to change if the latest noises from Threadneedle Street's policymakers are anything to go by - with the obvious health warning that previous hints of rate hikes have come to nothing.